NOTE 13: OTHER EVENTS
On May 9, 2019, with an effective date of March 13, 2019, the Company executed an advertising revenue share agreement (the “Agreement”) with a company providing wireless internet access to guests at various airports. Under the Agreement, the Company has the non-exclusive right to sell advertising for display on the service provider’s portal. The Agreement provides for revenue sharing of advertising sold by the Company and displayed by the service provider of 70% to the service provider and 30% to the Company until gross revenues reach $100,000 at which time the split shall be 65% to the service provider and 35% to the Company. The contract is for a one-year term and renews monthly thereafter until cancelled. The Company is currently in negotiations with several advertisers in respect to this contract. The Company’s sponsor and advertising relationships will be managed, maintained and retained by the Company at all times during and after the terms of the Agreement. The Company will provide the required creative formats as recommended by the service provider’s wireless for WiFi sponsor ad placements through the airport WiFi networks. This Agreement is expected to expand from airports to sports stadiums once the Company has achieved certain initial roll out targets.
On July 11, 2019, GZMC entered into a sponsorship agreement with a third party for the provision of exclusive and non-exclusive digital WiFi marketing solutions at three racing events between September and November 2019. The Company and the third party were unable to complete the provision of the services in time for implementation during 2019 as originally contemplated in the agreement and have agreed to extend the agreement to include events during 2020, commencing as early as January 2020. Under the terms of the agreement GZMC will receive a fee of $1,100,000. The Company will be required to provided audited financial statements in order to finalize this contract, which statements are currently being drafted and expected to be finalized prior to the end of fiscal 2019. Revenue in respect of this agreement will initially be recorded on the Cash Basis due to the various factors impacting timing of settlement of issued invoices.
On July 11, 2019 GZMC entered into a Master Agreement with a third party for the provision of wireless and digital promotion rights for certain events including WiFi media network advertising rights and the development of smart venue wireless networks and software engagement technology products for airports, stadiums, campuses and cities in the United States and International markets. Under the terms of the agreements, GZMC shall receive sponsorship fees in two installments as to 50% upon acceptance of identified venue projects, and the remaining balance under the terms as agreed based on each individual project (the “Sponsor Fees”). Further GZMC shall agree to allocate up to 20% of the total Sponsor Fees to new venue projects. The specific promotional rights over the term of the smart venues includes 3-5 year WiFi media network advertising rights with the smart venue, joint press releases, unlimited exclusive and non-exclusive WiFi advertising fee agreements to support third party advertising revenue and access to marketing data and analytics from WiFi and third party service providers. Each agreement may be renewed twice for a period of up to six (6) months each by mutual written consent under the same terms and conditions or such conditions as may be modified by the parties in writing at the time of each renewal. The contracts have identified certain major smart venues which are expected to be implemented during fiscal 2019. Invoices have been generated in respect of the initial provision of services, and the Company is expecting revenues to commence prior to the end of fiscal 2019. Our contracted service providers under these agreements are expected to receive initial funds prior to December 31, 2019 for performance bonds and wireless infrastructure payments. GZMC expects that audited financial statements will be required to be supplied for government type performance bonds in order to finalize projects, which statements are currently being drafted and expected to be finalized prior to the end of fiscal 2019. Revenue in respect of this agreement will initially be recorded on the Cash Basis due to the various factors impacting timing of settlement of issued invoices.
On July 11, 2019, GZMC entered into an Airport WiFi Sponsorship Marketing Agreement with a third party whereunder GZMC will secure long-term, exclusive and non-exclusive smart venues for WiFi marketing, digital marketing and data analytics for various brand sponsors at various airports across the United States. The term of the contract is thirty-six (36) months and is expected to commence during 2019 and terminate in 2022 at which point the contract may be extended in six-month intervals by mutual written consent.
On August 26, 2019, GZMC entered into a three-year master services agreement with a third party whereunder GZMC will provide and be responsible for the installation of WiFi media Network equipment and related software for stadiums. There will be several venues under the terms of the agreement commencing installations on various schedules. Currently, GZMC has generated invoices for the first 4 of 13 anticipated venues, at a cost of $400,000 per venue, with an initial deposit of $100,000 for each venue, and the remaining balances due sixty days from the date of the first deposit payment. The Company expects revenue under these contracts to commence prior to the end of fiscal 2019 and before the close of November 2019. Revenue in respect of this agreement will initially be recorded on the Cash Basis due to the various factors impacting timing of settlement of issued invoices.
The Company expects to generate revenue from several of the aforementioned contracts prior to the close of fiscal 2019.
